In terms of investment, the report said that it is likely to rebound by 5% in 2021 and vendors will cater to industry will “witness a sudden rise in demand”.
The report noted that the global machine tools market has been “immensely affected” by the outbreak of the Covid-19 pandemic due to activities in the manufacturing production line witnessing the sharpest contraction since the last decade.
In 2020, machine tools production and consumption fell with industrial production decreasing by 5% worldwide with Europe one of the most adversely affected regions, but all regions were impacted heavily.
Key findings were that the automotive industry, industrial machinery, and metals industry were the major end-users of machine tools accounting for over 60% of the total market share in terms of consumption.
The automotive sector is one of the major shareholders among end-user industries in the machine tools market but has witnessed the hardest hit due to Covid-19 the report said, as the demand for automotive vehicles went down by more than 10% globally.
Metal cutting tools dominated the market holding over 70% of the total market share both in terms of production and consumption in 2020, the report found. The sales of these devices are high in critical industries, including aerospace, defense, automotive, and shipbuilding. They are also observing an application in non-electrical sectors, which have crucial components incorporated using high precision machine tools.
Metal cutting tools by production value are likely to reach a revenue of approx. $90bn by 2026 on account of high demand from aerospace, defence, automotive, and shipbuilding end-users. By consumption value, metal forming tools are estimated to touch revenue of over $33bn by 2026, growing at a CAGR of around 8%.
In 2020, the Asia Pacific (APAC) region was the largest revenue contributor to the global machine tools market, accounting for a market share of over 46% by consumption value and 51% by production value in 2020. In APAC as well as globally, China accounted for a major share. The APAC machine tools market size is expected to reach $65 billion by 2026, growing at a promising CAGR of over 9%.
This, the report explained can be attributed to the increasing number of investments in fully automated industrial machinery and year-on-year growth in government spending toward defence aircraft and equipment in major economies across the region.
In addition, since the Chinese market is significantly dependent on its manufacturing industries, the demand for machine tools is high, it said. Rising investments in the industrial sector and the constant shift toward urbanisation are major macro factors propelling the market during the forecast period.
The report said North America will continue its steady growth after 2021 during the forecast period. APAC though will dominate the market and is expected to witness strong traction in demand for machine tools during the forecast period.
India, Taiwan, Malaysia, and South Korea are likely to emerge as the potential industry for machine tools manufacturers, the report said, while trade wars and the imposition of tariffs are the significant concerns confronted by vendors operating in the market, the report said and the recent trade war between the US and China affected the machine tools market “immensely”.
North America, APAC, and Europe are the key markets for vendors the report found, but Latin America and MEA are also expected to witness considerable growth in the coming years.
Owing to the rise in automation, shift toward digitalisation, and the advent of industry 4.0, the demand for automated machine tools has witnessed significant growth in the last few years, the report also found.
CNC machines accounted for around 62% share in the global machine tools market and is expected to grow at a significant CAGR of over 9% as compared to around 7% for non-CNC machines. CNC technology is projected to reach close to $78bn by 2026 due to the rise in Industry 4.0 concepts and smart factory development.
International players are also currently dominating the market the report said. However, several regional and foreign players with small market shares also have a presence in the market. New companies are catching up with established vendors and are expected to erode the market share of established vendors during the forecast period.
Since the market is shifting from conventional to long-term and cost-effective solutions, vendors can focus on the alignment of their product development with end-user-specific demand.
The report also said the machine tools market demand is expected to increase due to expansion and increased investments by private and public players in automotive, industrial equipment, metal industries in Europe, APAC, and North America. Thus, the demand for machine tools in various industrial applications is anticipated to grow.
